Alibaba IPO, which is involved in On line trading wanted to raise capital so that it could expand its spectrum of services offered to the people in the sphere of "business to business" marketing.
Alibaba IPO, had a fixed price range for the shares but when it was found that the shares are very much in demand, it decided to escalate the range of price slightly.
Alibaba is the largest e-commerce site in China. The company mainly caters to the suppliers as well as small buyers pertaining to sales leads and is engaged in on line trading. It has as many as 24 million on line registered members (as of October, 2007).
The Issue:
Alibaba.com was given the permission to list its shares on Hong Kong Stock Exchange in October 2007. Owing to tremendous demand of the shares the price range for Alibaba IPO had to be revamped. The price range was changed to HK$12 to HK$13.50 from HK$10 to HK$12.
As many as 858.9 million shares were offered for sale through the Alibaba initial public offer. The Alibaba IPO raised approximately USD$1.5 billion. The company planned to utilize the capital obtained from the IPO for the improvement of its Internet services in the international market thereby enhancing its global presence. The Alibaba IPO ranked second among the IPOs offered following Google.
Yahoo's role in the Alibaba IPO:
A 39% stake is held by Yahoo Inc, in Alibaba Group. Reports reveal that Yahoo Inc, subscribed to shares worth USD$100 million in the deal.
Shares split up:
About 85% of the shares offered by Alibaba IPO was meant for the institutional buyers. The retail buyers were entitled to the remaining number of shares.
Another group comprising of "seven strategic" bidders had bought 20% of the shares or shares worth $2.3 billion.
It was anticipated that
Alibaba IPO would raise the value of the company by 54 times the profit, the company is expected to earn during the year 2008. Dominating the business to business market, the company has a 69% market stake.
Listing of the Alibaba IPO:
The shares of Alibaba IPO were listed on the Hong Kong Stock Exchange.
BRLM or Book Running Lead Managers:
The lead managers of the Alibaba IPO inlcude:
- Goldman Sachs
- Deutsche Bank
- Morgan Stanley